Tax laws most taxing in India: WB-PwC study

NEW DELHI: India is home to the most burdensome tax administration as measured by the number of pages of central tax laws among the world's top 20 economies, a new study shows.

India, ranked 10th among the world's 20 biggest countries in terms of GDP, has 9,000 pages of primary tax legislation, global accounting major PricewaterhouseCoopers said in a joint study with World Bank released today.

Tax administration and compliance can be a significant obstacle to businesses and need to be considered as part of the decision on reform, PwC's Peter Cussons said.

The study found that the volume of primary tax legislation is on the increase worldwide. This means more new legislation is being enacted than repealed.

In the UK over the past 10 years, the number of pages has more than doubled from about 3,700 to 8,300, giving it the second ranking in the list.

The report said a particularly worrying consequence was that with the sheer volume of tax legislation no individual can possibly read all of it. The days of a tax director being confident of spanning all the relevant parts of the tax code seem to have also disappeared, it added.

PwC said many countries need to reflect on the likely deterrent effect of the ever increasing complexity of their tax laws and the resulting probable reduction in their international competitiveness.

Ultimately, when tax laws become too voluminous, compliance drops more through ignorance than deliberate evasion, it noted.